Leveraging Public Clouds to SaaS-Enable Enterprise Applications

In this Exclusive Q&A with the Founder, President & CEO of Virtual Ark, Marty Gauvin (pictured), the visionary serial entrepreneur speaks with Jeremy Geelan, Cloud Expo Conference Chair, about a variety of issues around Cloud computing including the all-important security aspects.

"Security in the Cloud isn’t bad, it’s just different," Gauvin at one point notes, adding: "It is essential to take a measured, careful approach to security issues." Here in the interview in full.

Cloud Computing Journal: As a successful serial entrepreneur and now the CEO of a major new player in the fast-emerging Cloud ecosystem, how do you see your company fitting in? What layer of the ecosystem are we talking about?

Marty Gauvin: Virtual Ark fills a significant gap between the Cloud vendors like Amazon, Rackspace, Microsoft etc and the customer. By providing deep application management services and support, we help SaaS-enable applications on the Cloud with our ISV partners.

Rather than being a "cloud vendor", Virtual Ark is a Cloud expert that uses Cloud services on behalf of its customers to deliver their enterprise applications in a SaaS model with consumption-based pricing similar to that delivered on public clouds.

As a result, customers can choose their preferred application as a SaaS solution. Because of our expertise and use of Public Cloud infrastructure services, Virtual Ark has virtually instant international reach enabling customers to use their applications globally, quickly and easily.

Virtual Ark was Platinum Sponsor of the 5th International Cloud Expo held April 19-21, 2010 at the Jacob Javits Convention Center in New York

Gauvin: ERP, CRM, Financial, Web, Content Management Systems and line of business applications across a wide range of industries. Virtual Ark works with ISV partners to SaaS-enable their applications. There is typically very little coding required by our ISV partners of their original applications and Virtual Ark does almost all of the work to SaaS-enable these applications. Significantly for the enterprise, multi-tenancy is not a requirement in order for Virtual Ark to SaaS-enable these applications.

Cloud Computing Journal:But what about security issues: Is it really sensible for a Tier 1 company to be running its core business applications in the Cloud?

Gauvin: Enterprises require a risk analysis process that systematically identifies and assesses the relevant aspects of the chosen computing model or service. This equips them to analyze risk by examining the technical and process dimensions of a specific implementation rather than trying to second-guess the security needs of a generic service identified as "Cloud Computing."

Security in the Cloud isn't bad, it's just different. It is essential to take a measured, careful approach to security issues. This approach should apply whether you protect a person, a physical asset or your data. What changes are the risks and threats to which you respond.

In the case of the Cloud-enabled applications, techniques such as encryption and overlay tools are available to meet significant security accreditation when implemented correctly.

Cloud Computing Journal:What is the cost model? Is the platform available - in true Cloud fashion - on a pay-as-you-go/usage basis?

Gauvin: Absolutely. Because we have no underlying fixed cost of infrastructure, we can bring very flexible billing models to market. While billing varies from application to application, all are aligned as close as possible to a sensible consumption based-pricing model. Some use "number of users per hour"; others use "by transaction". Ultimately, because we leverage existing Cloud service providers, we are able to bring pricing billed on a pay-as-you-go basis.

This is the central tenet of Virtual Ark's approach to SaaS because it provides our ISV partners with a strategic advantage over their competitors. Other SaaS options are typically billed on a minimum number of user licenses over contract terms of two years or more. Our pay-as-you-go model enables our partners to align licensing as closely as possible to how the customer consumes the application.

Cloud Computing Journal:How about other front-loaded costs, are there any? And what about the minimum length of any contract that a customer may have to commit to - how long is that?

Gauvin: Customers can choose to have no minimum contract term obligation. This could apply where a customer converts an existing on -premise solution to our SaaS model. Customers are free to leave at any time, or if they wish, to license the Virtual Ark Platform in the Cloud and simply "take over the keys" and drive the application themselves without any migration!

If the application is new to the customer, then implementation service costs may apply, which can vary considerably due to differing customer requirements. However, implementation timetables are massively reduced by using our templated solutions and because our software can be deployed instantly.

Gauvin: No, not at all. Virtual Ark can manage dedicated instances of the application for specific customer needs as if they were "one" application instance. In our view, the security, integration and performance requirements of our target market, large enterprise customers, are ill-suited to multi-tenant solutions. We think this is a key reason why SaaS has not been taken up more strongly by this market segment, and why many ISVs have not modified their applications to be multi-tenant. Virtual Ark sees this as an important differentiator in its value proposition.

Cloud Computing Journal:How does a potential customer know that Virtual Ark is for real? What kinds of partners have you already attracted?

Gauvin: Virtual Ark commenced operation in July 2009. The company is backed by private shareholding and the investment bank, Baron Partners. The shareholders and management team (which has worked together for a decade), sold their previous company to the Macquarie Communications Infrastructure Group for US$64m.

Current partners include Amazon Web Services, Microsoft Azure and Rackspace with major announcements regarding ISV partners to be made at next month's Cloud Expo in New York.

Cloud Computing Journal: Virtual Ark is an international business. Why are its primary markets North America and Europe rather than, say, the Far East and/or China?

Gauvin: Virtual Ark's market entry is largely determined by the availability of Public Clouds in various regions. Amazon, Rackspace and Microsoft Azure for example all currently have plans to build out their Asian Cloud presence during 2010.

Having said this, some applications will perform acceptably in Asia today, so we are already working with ISVs in this region today.

Cloud Computing Journal: Cloud Expo has already mushroomed in size to the extent that we have now moved it into one of the largest convention centers in the world, New York's Jacob Javits Center. As a successful serial entrepreneur, what was it particularly that led you to foresee that Cloud Computing would become so much the flavor of enterprise IT already by 2010?

Gauvin: Most Cloud vendors are focused on the small to medium enterprise market. As a result, this market is hotly contested and at the commodity end of SaaS and Cloud services.

By contrast, Virtual Ark's target market (the top end of the enterprise market) has been slow to adopt SaaS and Public Clouds. This is primarily because it is a much more complex market and thus more difficult to address. Also, ISVs have been slow to bring SaaS versions of their products to this market because of the perceived cost and complexity of doing so.

The opportunity for Virtual Ark is that these large enterprise customers want to continue using applications they are comfortable with while gaining the benefits of the Cloud. Virtual Ark removes almost all of the barriers I've outlined! As such, we expect to be at the forefront of SaaS and Cloud take-up by the top end of the enterprise market.

Cloud Computing Journal:You will be personally giving a General Session in the keynote room at the New York event. Would you care to share with our readers a ‘sneak peek' of your theme/s?

Gauvin: My presentation aims to challenge traditional views of outsourcing, cloud security, SaaS and the likely adoption of Public Cloud services by large enterprise customers globally.

Outsourcing is entering its third generation with advent of the Cloud. The first iteration of outsourcing was "your mess for less", followed by strategic or selective sourcing, which included hosting. Due to the emergence of Cloud Computing, "third generation outsourcing" stands to materially revolutionize and challenge traditional outsourcing models in a way that no previous models have. The Cloud also delivers an opportunity for the wider adoption of existing enterprise applications in a SaaS model.

When we started putting Virtual Ark together with a team that had worked firstly in ‘conventional' IT outsourcing and then in the selective sourcing world of the last 10 years, I recognized that the capacity for well-executed Cloud computing to revolutionize IT sourcing was profound.

So much of what customers and vendors take for granted in their sourcing frameworks has its roots in the assumption that infrastructure is expensive and fixed. It is extraordinary how far and how fast things can change when these constraints are removed. Virtual Ark is evidence of that fact.

Cloud Computing Journal: Why did you call your company "Virtual Ark"?

Gauvin:: We see the combined effect of Cloud computing and outsourcing - "Generation 3 Outsourcing" - driving the use of IT for a significant period of time. Enterprise customers will depend upon successfully leveraging this confluence of trends to secure their business operations, IP, brand and data. The ‘ark' is the place where a civilization puts their most precious resources. The ‘virtual ark' is the ideal metaphor for how enterprises must view their information and its migration to this new generation of services.

Cloud Computing Journal: Who in your view are currently the world's top five Cloud Computing companies?

Cloud Computing Journal:What's your top tip, as a seasoned software executive, to those other CEOs out there who may be looking for some certain way to ensure they're alive (and preferably well) as a company in 2011?

Gauvin: My top tip is to build flexibility into your organization so it can be incredibly responsive to both opportunities and threats. The GFC has demonstrated to businesses globally that we face an unpredictable future with a higher rate of change. Accordingly, at Virtual Ark, we "eat our own dog food" by maintaining all our business systems in the Cloud. That gives us both the flexibility and the focus to meet our customers emerging needs for SaaS-enabled applications on the Cloud.

Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

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